It is time to salvage Turkey’s ties with Europe, top business group urges

ISTANBUL

“It is the time for us to recover our ties with Europe. We need to take steps in an effort to achieve this goal immediately. If Turkey does this, things will change because Europe does not want to lose Turkey,” Bilecik told state-run Anadolu Agency on Jan. 8.

“Businesspeople from the both sides have been looking for a recovery in ties. If we start to take these constructive steps for rapprochement by clinching talks for an update in the Customs Union deal, 2018 will be a year of hope and new beginnings,” he added.

Bilecik said 2017 showed the fact Turkey that “could not ignore Europe,” while also showing that domestic consumption-driven growth without making reforms led to high inflation. As a result, Ankara must reflect on what it should do for a better economic outlook and make the required policy changes in the upcoming period.

“In 2017 we could have lured much higher foreign direct investment, rather than settling for an increase in our exports. We should see and assess such opportunities and we should keep these in mind in 2018,” Bilecik said, noting that the EuropeanUnion had entered a “high growth cycle.”

‘Two main lessons’

Inflation in Turkey was measured at 11.92 percent at the end of 2017, after year in which it remained persistently above 10 percent.

Bilecik said higher inflation is a result of giving up financial stability for higher economic growth in the short-term.

“11.92 percent is, unfortunately, the highest inflation rate we have had since 2003. Core inflation, which excludes food and energy prices, reached to 12.3 percent, also the highest since 2003. Producer price inflation also rose to 15.47 percent,” he said.

“There are two main lessons we should take from 2017: First of all, we cannot ignore Europe. Secondly, we pay the cost of domestic consumption-driven growth and no reforms with high inflation,” he added.

“We must immediately realize the kind of reforms that will increase our competitiveness and strengthen the foundations of our economy. We must do this in 2018. If we do not make these reforms, we will continue to be seen one of world’s most fragile economies. That is the biggest risk facing Turkey,” the TÜSİAD chair also said.